Author Archives: usxcanada

Fugitive Fortunes Tracked in Canada is the big cover page headline in the May 2-8 print issue of Asian Pacific Post. Read the story online here:

 
http://www.asianpacificpost.com/article/5518-fugitive-fortunes-tracked-canada.html
 

Now Beijing in addition to signing an agreement to get at the fugitives, is working on plan with Ottawa to share the assets that Chinese fugitives illegally transferred to Canada.

Negotiations are in advanced stages and an agreement should be reached in the next few months, Canadian Ambassador Guy Saint-Jacques told China Daily.

 
If Canada gets a good cut from that asset pool, maybe it will feel better about writing off what the U.S. extracts from “US persons” who happen to reside in Canada? Or. Is next step to provide the U.S. access to its Canadian “fugitives” if the U.S. will go halvies?
 

 
Cross-posted from USxCanada InfoShop

 
Diane Francis
Canada take note: America’s tax system is messy but good
HuffPost (4 Jan 2013)

http://www.huffingtonpost.ca/diane-francis/canada-america-tax-system_b_2411458.html

Dual citizen Francis uses her “expensive perch” to claim a “unique perspective” that the U.S. system of “checks and balances” has just now become operational — despite “a big fiscal mess, due to panic over 9/11, the 2008 debacle and unjustifiable tax cuts and wars paid for with a national credit card.” Meanwhile, Canadians are judged to “pay higher taxes because there are no checks and balances.” Comment: It is a pleasure to think that a person with this narrow tax-focused mindset will continue to be subjected to the highest taxation going in either of the two systems, together with the costs and uncertainties and risks of compliance with U.S. filing requirements.
 

 
Rather than engage in the insipid ritual of emitting a few conventional and boring and repetitive words in this season of hope and joy, usxcanada went data shopping to try to find a present to post for Brockers. The following perspective on U.S. passport is cross-posted from the growing archive (in less than one year, more than 300 annotated entries) over at USxCanada InfoShop. What will 2013 bring? Certainly to many in our circle, hopes for freedom to be obtained, and joy in freedom achieved.
 
 

Jeffrey Kahn
The extraordinary Mrs. Shipley: how the United States controlled international travel before the age of terrorism
Connecticut Law Review 43:3 (Feb 2011) 819-888

http://uconn.lawreviewnetwork.com/files/documents/JeffreyKahn43Conn.L.Rev.819.pdf

[389 footnotes] Career civil servant Ruth B. Shipley acted as chief of the Passport Division of the U.S. State Department from 1928 to 1955. Shipley personally reviewed every passport application, and prior to 1958 Supreme Court decision, her actions were subject to no judicial review. Shipley denied passports to Paul Robeson, Arthur Miller, Linus Pauling, and “many other” Americans during the 1950s. Kahn’s article explores how Shipley acquired such power and how the US passport became an instrument to prevent rather than permit travel. A backgrounder opening (825-842) provides a history of travel controls from 1789 to the Shipley era. Originally the passport was “a document [issued by the country that the traveler sought to enter] that granted a foreigner permission to pass into or out of a country’s ports” (825) — the opposite of what the passport came to be. Kahn concludes that current administration of U.S. citizens has achieved the Shipley effect through authority “diffused among intelligence analysts in multiple agencies who now compile watchlists of people deemed too dangerous to travel.” In this environment, judicial review is crippled by “the traditional deference accorded to national security and the sometimes secret processes by which that government interest is secured” (887).
 

 
Cross-posted from USxCanada because of embedded perspectives of interest: Canada easy U.S. not; low threshhold for estate concerns; Canadian banks preparing to capitulate.

Carolyne Regan
Cross-border issues complex: proper planning saves fortunes in estate taxes
Windsor Star (1 Nov 2012)

http://www.windsorstar.com/Cross+border+issues+complex/7480168/story.html

“A very stable tax system in Canada” is contrasted with the U.S., where “changes can be very dramatic from one year to the next.” Estate planning is seen as required for assets “anywhere near” $1 million. “Canadian banks are becoming less hesitant to share information with the IRS.” This infomercial-tinged “special to the Star” relies on input from an accountant and an attorney whose contact information is listed at the end. No mention is made of severing ties to the United States.
 

 
7. The United States is the World’s Greatest Force for Good

Of all the shocking things you can say around the [Canadian] dinner table, this is the most shocking one. After all, America-bashing is part of our national identity.

 
Thus ends — and begins — Margaret Wente’s cutesy little list of seven deconstructions of what all Canadians seem likely (to her) to think.

Wente must no longer feel like she could possibly be on the hit list?

Please, Uncle, sock it to her!
 

 
those who choose to become tax exiles betray the countries that enabled their success

France’s Fleeing Billionaire
 

 
Cross-posted from Perspectives at USxCanada InfoShop.

 
From a broadscale, abstract perspective, the voluntary and other disclosure programs of the IRS after 2009 bear resemblance to the post 9/11 decade of tottering toward ever more byzantine and restrictive financial reporting to U.S. authorities by unfortunate “U.S. persons” who merely reside “overseas.”

 
The Decade

At the level of decade, the multiple period provisions of Form 8854 Initial and Annual Expatriation Statement bear witness to a wish to tighten the screws ever more, with very different regimes operating pre-2004, 2004-2008, post-2008. One other indicator, from a different direction, is the institution in mid-2010 of a punitive $450 fee for renunciation of U.S. citizenship, in face of a skyrocketing rate of ship-of-state jumpers.

 
Voluntary Disclosure

The voluntary disclosure programs of 2009 to the present manifest steadily upward penalty increases, to a current 27.5 percent.

According to sketchy IRS reporting as of early 2012, the 2009 program generated $3.4 billion with 95 percent closure, and the 2011 program generated another $1 billion. [1]

More IRS reporting in mid-2012 shows acquisition of another $0.6 billion and 1500 further disclosures (compared to 33,000 in the first two) under the new third open-ended program. [2]  (This 1500 quantifies the “hundreds” who were said to be eagerly coming forward after September 2011. [1])

This looks like a clear case of diminishing returns.

 
All Extraterritorials

Yet another enforcement prong, in operation for about a year, deserves scrutiny. In December 2011 the IRS restated existing procedures for persons “residing outside the U.S.” under the guise of advertising policy relaxation. [3]  The IRS then followed up in mid-2012 with an announcement of specific guidelines to come. [4]  At the end of August 2012 the specifications [5] made it apparent that potential participants would gain little assurance by “coming in from the cold,” could well expose themselves to unwarranted harsh scrutiny, and would certainly subject themselves to severe compliance costs in the form of legal and accounting fees.

The IRS together with its master the United States government increasingly look like dancers paired as a mad duo dervish, whirling ever faster in dubious pursuit of payoff phantasms, with onlookers increasingly bemused by the perverse chasing of the partner’s tail.

 
References

[1]  IRS Offshore Programs Produce $4.4 Billion To Date for Nation’s Taxpayers; Offshore Voluntary Disclosure Program Reopens

[2]  IRS Says Offshore Effort Tops $5 Billion, Announces New Details on the Voluntary Disclosure Program and Closing of Offshore Loophole

[3]  Information for U.S. citizens or dual citizens residing outside the U.S.

[4]  IRS announces efforts to help U. S. citizens overseas including dual
citizens and those with foreign retirement plans

[5]  Instructions for new streamlined filing compliance procedures for non-resident, non-filer U.S. taxpayers
 

 
Quite some time back, it struck me that Canada is a tenuous construct. The occasion for that insight was realizing that what I like most about Canada as a “state” is the fact of its precarity. The wobbly prop at the prominent corner is Quebec. No a mari usque ad mare without getting across Quebec! Therefore no need to suffer rot about one nation indivisible. The wobbly prop at another corner is that weird opening to the anthem: O Canada, our home on native land [subtly emended in the interests of truthtelling].

This is all preamble to a pointer to a book review with a map that suggests how messy North America is, how artificial that 49th parallel is, and how fabricated the 145-year-old northern ex-colony is. Provocative, n’est-ce pas?

Never forget that all Canada has done for US extraterritorials is to reread the tax treaty and to reiterate what already happens to be there. Sort of like most of what the IRS manages to come up with after the ambassador tells grannies to sit tight.
 

 
The time has arrived to share a few details about one of my wellsprings of inspiration.

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The power of the individual in mass modern society mostly consists in the ability to say NO — and perhaps in being prepared to accept consequences.

Consequences may include lowered standard of living, curtailment of advancement, physical relocation, social ostracism, overt state repression, abandonment of citizenship, and torture and death.

People who say NO often discover the joy of exercising freedom, and the sometimes surprising lack of immediate direct proportional consequence for standing out and speaking up. This is especially true if resistance has foundation in genuine social relationships. [See The Power of Habit for an enthralling account of how and why Rosa Parks managed to spark a revolution.]
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